Microsoft's Phil Spencer On Pre-Orders, The Cloud, And Indies

Shortly after arriving in Seattle for PAX 2013, Game Informer took a trip to Microsoft's Redmond, Washington campus to meet with Microsoft Studios vice president Phil Spencer. During the hour-long conversation, we spoke about the state of Xbox One pre-orders, the real benefit of cloud computing, and Microsoft's new push with independent developers.

Since the Xbox One was revealed on May 21, 2013, Microsoft's profile has undergone dramatic shifts. The company faced unexpected consumer backlash over its DRM, online connectivity, and independent self-publishing policies.

Since E3 in June, Microsoft has systematically reversed, amended, and clarified those policies, each time wooing back a segment of an unhappy user base. Pre-orders are going well, Spencer tells us, but that metric isn't as important to him as making sure that consumers have a good experience.

"We feel great about our hardware yield," Spencer says. "We feel great about the number of units we're going to have at launch. Our pre-orders are going really well; better than they did for the 360." Pre-orders continue to sell out each time Microsoft releases another batch to retailers.

This pulsed approach is a calculated effort, and there is no doubt the company is attempting a delicate balance. Other consoles have suffered significant problems on both ends of the spectrum. Nintendo's Wii was unavailable for months following launch, but the Wii U was so well stocked that the demand perception was adversely affected.

"You want people to be able to walk in the store and buy one on day one, so you're trying to manage the inventory that isn't pre-sold," Spencer says. "It's not a yield problem, it's us trying to manage the hardware side. I want parents who don't think about pre-ordering electronics to be able to walk in and have a chance to find a box. There might be a line, but I don't want it to be that if you didn't pre-order in September, you can't get one. That doesn't feel like a great consumer experience."

While he wouldn't give us pre-order numbers, Spencer assures us that things are looking good. "Availability should feel a lot better than it did for 360," he says. "If people want to pick up more controllers and games, they'll be there. We feel really good about our pre-order number, and we're managing it through allocation rather than demand. [Pre-order] isn't the business. It's way more important to me what happens when people walk in the store. The business is selling consoles."

"Our relationship with the indie development community has always been strong," Spencer says. "It doesn't mean everybody loves us. But if you look at the flow of content during the 360 generation and some of the indie hits that debuted on console on 360, people were clearly investing in putting their games on our platform."

Both Spencer and Xbox chief product officer Marc Whitten have emphasized time and again that on Xbox One, games are going to be given a level playing field. Xbox Live Arcade and Xbox Live Indie Games as segments are disappearing.

"We want to have a platform that all of the great game developers can target. We have to be able to support that," Spencer says. And those creators seem to be responding. The ID@Xbox program has already proven popular. "In the first three hours, we had hundreds and hundreds of developers sign up," Spencer tells us.

Developers are also enamored of Microsoft's cloud capabilities. The 300,000 servers at the company's disposal provide new opportunities for developers of all sizes.

"Both Kinect and Cloud as it relates to indie has been really interesting," Spencer says. "If you're a two-person studio, you're probably not going to invest in a server farm. You won't know how many to buy or what the scale is going to look like. It's really hard for those guys. What we're able to do with Cloud, is say, 'Here are 300,000 servers. You don't need to tell us what that demand looks like. You don't even have to know.' We will handle the scaling capability on the backend. That has been one of the more interesting uses."

Scalability benefits of Microsoft's cloud services could be critical in the MMO and persistent online game spaces. These genres typically has problems at launch because of demand spikes. More flexible scaling provided by the cloud could help alleviate these issues.

Additionally, should developers and publishers choose to use Microsoft's services, the impact for gamers could be just as significant later in a title's life. Servers cost money to use, and with improved scalability, it is conceivable that games could have longer lifespans due to easier management of expenses relative to dwindling user bases.

Another major selling point of the Xbox One has been living room integration. Microsoft has recently shared with us how sports fans will experience their favorite programming on Xbox One, and we've heard about the benefits of fast-switching between television and gaming while waiting for multiplayer matching.

Spencer told us more about how the Kinect's IR blaster will work to help streamline integration. "Kinect sends out the commands for your TV and your media stack," he explains. "Right now, we're asking users to select their provider and box. Our goal is to get to the point where it figures it out by asking you a few questions. That's something we're on for the next two years, but we're going to get close at launch for a lot of people."

The Xbox One profile will also enable users to create a favorite channel list. Should you log into your profile away from home (either on your box or someone else's), those favorites will still work. "My channel lineup is mine and tagged as favorites (and saved by channel name and not number)," Spencer says. "If I go to your house on a different cable system and log into my account, my favorites move with me on your box and they just work. My favorites are still mine and will give me the right program guide regardless of where the Xbox is."

With only 70 or so days left before the Xbox One's launch, the picture of how users will interact with the new console is starting to come into focus. We'll have more on the Xbox One user experience in the coming weeks.